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WASHINGTON - A New York senator will try to cut $4.5 billion from the nation's publicly subsidized crop insurance program to preserve spending on the nation's food stamp program.
Sen. Kirsten Gillibrand, D-N.Y., will offer an amendment to the new farm bill that the Senate could vote on as early as Tuesday.
The farm bill, which is of particular importance in Minnesota and other Farm Belt states, contains an expansion of the crop insurance program designed to make up for the elimination of direct payments to farmers.
The program is not restricted by a farmer's wealth. It provided more than a half billion public dollars to farmers and crop insurance companies in Minnesota in 2011, according to a recent report by the Environmental Working Group.
The crop insurance, which protects farmers against natural disasters and volatile markets, provides public subsidies for an average of 62 percent of farmers' crop insurance premiums.
The crop insurance program also pays overhead and administrative costs to crop insurance companies and negotiates a rate of return for insurance companies.
Gillibrand proposes to cut overhead and administration from $1.3 billion per year to $825 million per year and to reduce the rate of return to crop insurance companies from 14 percent to 12 percent, a move designed to save $5 billion over 10 years.
Gillibrand said on Monday that the Congressional Budget Office has estimated that food stamp cuts currently in the farm bill would take away an average of $90 per month in payments to nearly half a million households.
"The farm bill ... [is] very much about the decisions we make regarding economic growth, regarding our agricultural industries, and the moral obligation we have to our families that are at risk," said Gillibrand, a member of the Senate Agriculture Committee.
Last week, an advocacy group known as the Environmental Working Group criticized the amount of crop insurance subsidies going to rich agribusinesses.
The fate of the amendment is uncertain.
In a statement Monday, Sen. Amy Klobuchar, D-Minn., said, "The 2012 Farm Bill makes $23 billion in cuts; nearly two-thirds are to farm programs even though they are only 14 percent of the Farm Bill. There is a lot of good in this farm bill for Minnesota, including maintaining strong conservation and school lunch programs."
Jim Spencer 202-408-2752